Single Touch Payroll Reporting Changes Announced by the ATO

The Australian Taxation Office (ATO) has recently announced changes to Single Touch Payroll (STP) reporting requirements for employers. These changes reflect measures that were announced in the 2019-2020 Federal Budget.

The changes are collectively known as ‘STP Phase 2’. They are intended to reduce the amount of reporting necessary to different government agencies.

STP reporting has been mandatory for employers with 20 staff or more since 1 July 2018. It has been mandatory for businesses with less than 20 staff since 1 July 2019.

What are the main changes in STP Phase 2 reporting?

  • The reason for any staff member ceasing employment will need to be provided. For example, if it was voluntary, a termination or redundancy, or due to health reasons. Providing this information this will reduce the need to provide the staff member with an employment separation certificate.
  • A staff member’s tax file number and withholding declaration will need to be reported in the ‘Employment Conditions’ section of the STP report.

This will eliminate the current need to send this information to the ATO separately.

  • A staff member’s child support garnishee or deduction payments will be able to be voluntarily reported via STP instead of requiring a separate, manual submission to the relevant child support agency.  
  • The nature of a staff member’s employment will need to be provided. In other words, whether the person is working full-time, part-time, or casually.
  • The type of income that a staff member is earning will need to be reported. For example, salary and wages, allowances, bonuses, commissions, directors’ fees, paid leave and/or overtime.
  • ‘Closely-held payees’ (family members of business owners, directors or shareholders), working holiday-makers and foreign income (including the country code of this income) will need to be identified.
  • Any salary-sacrificed payments of staff members will need to be reported via STP.
  • Lump sum payment types E (back pay) and W (return to work) will also need to be reported.

When does STP Phase 2 reporting start?

It will be mandatory to start your STP Phase 2 reporting from 1 January 2022. There is no need for you to do anything now. Your STP-enabled software should be updated before then to help ensure your compliance.

You should contact your software provider if you have any concerns. You may be able to apply to the ATO for additional transition time if necessary.

Will there be any changes to the STP lodgement process and due dates for Phase 2 reporting?

No, your STP reports will still be due either on or before your business’ pay day. The only exception is if you are eligible for a quarterly STP reporting concession.

How we can help

Contact us if you need any advice on how to comply with your STP Phase 2 reporting requirements.  

Our experienced team of specialists in Richmond can also help with any other business accounting or tax services you may require. We are a full-service accounting firm and can tailor our services to suit your specific needs.   

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